Similar Search Results

Bad Mergers Revisited: An Incentive Perspective

Kräkel, Matthias; Müller, Daniel - Verein für Socialpolitik - VfS - 2013

We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low...

Persistent link: https://www.econbiz.de/10010986082

An optimal incentive contract to avert firm relocation

Pollrich, Martin; Schmidt, Robert - Verein für Socialpolitik - VfS - 2014

guarantee that the firm also stays in the future. We investigate situations where contracts between a local regulator and the … undertakes a location-specific investment that is not contractible. When long-term contracts are feasible, the regulator averts …-term contracts are feasible, contracts with positive transfers in the second period cannot be implemented if the firm's investment is …

Persistent link: https://www.econbiz.de/10011164135

Sequential, multidimensional screening

Litterscheid, Sina; Szalay, Dezsö - Verein für Socialpolitik - VfS - 2014

We study a sequential screening problem where the agent produces an object consisting of multiple items and has a multidimensional type that he learns over time. Depending on the strength of complementarity/substitutability of the items, the optimal allocation features a different pattern of...

Persistent link: https://www.econbiz.de/10011164175

Institutions, Shared Guilt, and Moral Transgression

Szech, Nora; Rothenhäusler, Dominik; Schweizer, Nikolaus - Verein für Socialpolitik - VfS - 2014

This paper studies the influence of shared guilt and diffused responsibility in institutions that may require the support of several actors to realize specific outcomes. Decision makers weigh supporting an immoral yet egoistically advantageous action to the detriment of a third party against...

Persistent link: https://www.econbiz.de/10011163883

Behaving kindly, talking about it, and being rewarded for it?!

Walkowitz, Gari; Gürtler, Oliver; Wiesen, Daniel - Verein für Socialpolitik - VfS - 2014

In a principal-agent setup, we investigate agents disclosure of conflict of interests revealing deliberate or undeliberate kindness and its affect on principals reciprocal behavior. To this end, we firstly introduce a theoretical model refering to Hart and Moore (2008) which captures aspects of...

Persistent link: https://www.econbiz.de/10011164118

Discharge of residual debt: Do private and institutional lenders differ?

Kirchkamp, Oliver; Prömpers, Henning - Verein für Socialpolitik - VfS - 2013

With the help of lab experiments we study the impact of discharging insolvent debtors of their residual debt. We investigate the impact of different participation rules and the impact of different types of lenders. We find that higher participation rates encourage risk taking behaviour of...

Persistent link: https://www.econbiz.de/10010986039

Wage Bargaining when Workers Have Fairness Concerns

Kragl, Jenny; Gogova, Martina - Verein für Socialpolitik - VfS - 2013

We analyze optimal labor contracts when the worker is inequity averse towards the employer. Welfare is maximized for an …

Persistent link: https://www.econbiz.de/10010957968

Loss Aversion and Ex Post Inefficient Renegotiation

Herweg, Fabian; Schmidt, Klaus - Verein für Socialpolitik - VfS - 2013

-term contracts. First, it explains why parties often abstain from writing a beneficial long-term contract or why some contracts …. Third, it shows that employment contracts can be strictly optimal even if parties are free to renegotiate. …

Persistent link: https://www.econbiz.de/10010957990

Incentive Design and Mis-Allocated Effort

Schnedler, Wendelin - Verein für Socialpolitik - VfS - 2013

Incentives often distort behavior: they induce agents to exert effort but this effort is not employed optimally. This paper proposes a theory of incentive design allowing for such distorted behavior. At the heart of the theory is a trade-off between getting the agent to exert effort and ensuring...

Persistent link: https://www.econbiz.de/10010958061

Effort Incentives and On-the-Job Search: An Alternative Role for Efficiency Wages in Employment Contracts

Herbold, Daniel - Verein für Socialpolitik - VfS - 2013

We study an infinitely repeated principal-agent relationship with on-the-job search. On-the-job search is modeled as a dimension of the agent's effort vector that has no effect on output, but raises his future outside option. The agent's incentives to search are increasing in the degree to which...

Persistent link: https://www.econbiz.de/10010958156